Microsoft and Amazon Downgraded as Analyst Questions AI Bull Case

Microsoft and Amazon were downgraded to neutral from buy by Rothschild & Co Redburn's Alexander Haissl, citing that the bull case for generative artificial intelligence is no longer clear and hyperscalers should be approached with caution. Haissl noted that the underlying economics are "far weaker than assumed" and that the industry's trust in Gen-AI is misplaced. The downgrades follow a selloff in the tech-heavy Nasdaq 100 and concerns over stretched valuations and depreciating assets.